Mortgage 2 or 5 year fix?
Discussion
On a 1.49% fix which expires in May, base rate of Santander is daft so need to sign up to a fix / term deal.
Being offered
1.29% over 2 years with 3% early repayment charge
Or
1.79% over 5 years with 5% early repayment charge.
Both carry a £999 product fee. Have greater than 50% equity and chunky balance so rate important.
So who has a view on 2 or 5 years, anything better in marketplace?
Bennno
Being offered
1.29% over 2 years with 3% early repayment charge
Or
1.79% over 5 years with 5% early repayment charge.
Both carry a £999 product fee. Have greater than 50% equity and chunky balance so rate important.
So who has a view on 2 or 5 years, anything better in marketplace?
Bennno
bennno said:
On a 1.49% fix which expires in May, base rate of Santander is daft so need to sign up to a fix / term deal.
Being offered
1.29% over 2 years with 3% early repayment charge
Or
1.79% over 5 years with 5% early repayment charge.
Both carry a £999 product fee. Have greater than 50% equity and chunky balance so rate important.
So who has a view on 2 or 5 years, anything better in marketplace?
Bennno
Similar thread discussed a few weeks ago that may be of helpBeing offered
1.29% over 2 years with 3% early repayment charge
Or
1.79% over 5 years with 5% early repayment charge.
Both carry a £999 product fee. Have greater than 50% equity and chunky balance so rate important.
So who has a view on 2 or 5 years, anything better in marketplace?
Bennno
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Have you compared with fee-free deals? Depending on the size of your balance it might not make sense to pay the fee for a lower rate.
No one knows what will happen to interest rates over a 5 year period. Anyone who says they know is deluding themselves.
If you value certainty and don't might paying a little more, go for the 5-year deal.
If you're ok with a bit more risk and like the idea of paying less in the short term, go for the 2-year deal.
I'll repeat again that no one can give you worthwhile advice on the movement of interest rates over a 5-year time period. If someone tells you that they can do this with any degree of certainty, they are a charlatan.
No one knows what will happen to interest rates over a 5 year period. Anyone who says they know is deluding themselves.
If you value certainty and don't might paying a little more, go for the 5-year deal.
If you're ok with a bit more risk and like the idea of paying less in the short term, go for the 2-year deal.
I'll repeat again that no one can give you worthwhile advice on the movement of interest rates over a 5-year time period. If someone tells you that they can do this with any degree of certainty, they are a charlatan.
IMO two years is so short it's a waste of time so go for a minimum of 5.
I'm not a particular fan of fixing because, on average, the "fix" has to be paid for - there's no such thing as a free lunch - and it leaves the question "what happens after the end of the fix?" However, I recognise fixing can give useful certainty and IMO for that certainty to be worth having the fix needs to be in place for as long a period as possible.
I'm not a particular fan of fixing because, on average, the "fix" has to be paid for - there's no such thing as a free lunch - and it leaves the question "what happens after the end of the fix?" However, I recognise fixing can give useful certainty and IMO for that certainty to be worth having the fix needs to be in place for as long a period as possible.
klivedrgar said:
The other consideration is the redemption penalties. Longer fixes tend to have longer tie ins with penalties for leaving before the end of the fixed term. If you think you may want to sell in that time then you want to make sure you know what the penalties would be.
All mortgages are portable these days.....If u go for 2 year mortgage, don't forget to include cost of £1000 odd for another mortgage after 2 years.... We were in similar situation 6.minth back and went for 5 year rate to allow for confirmed payments, hassle of another mortgage after 2 years (if going for 2 year) and fees...
Sarnie said:
All mortgages are portable these days.....
I didn't realise this 
I do think the flexibility to sell without having to buy somewhere else is useful though, depending on your circumstances. Having just fixed a 2 yr b2l mortgage and a 2yr resi mortgage.. the fees definitely need to be factored into the equation. B2L mortgage rates have gone down but fees have gone up, and the most competitive resi deals don't always come with the free valuation, free legals, low arrangement fees. I think in total across the two mortgages the cost of arranging was close to 5k. It still worked out marginally cheaper than the longer term fixes, but I will have the aggro again in 2 years time, when rates could well have moved substantially.
klivedrgar said:
I didn't realise this I do think the flexibility to sell without having to buy somewhere else is useful though, depending on your circumstances.
Having just fixed a 2 yr b2l mortgage and a 2yr resi mortgage.. the fees definitely need to be factored into the equation. B2L mortgage rates have gone down but fees have gone up, and the most competitive resi deals don't always come with the free valuation, free legals, low arrangement fees. I think in total across the two mortgages the cost of arranging was close to 5k. It still worked out marginally cheaper than the longer term fixes, but I will have the aggro again in 2 years time, when rates could well have moved substantially.
£5k!?!?!? I do think the flexibility to sell without having to buy somewhere else is useful though, depending on your circumstances. Having just fixed a 2 yr b2l mortgage and a 2yr resi mortgage.. the fees definitely need to be factored into the equation. B2L mortgage rates have gone down but fees have gone up, and the most competitive resi deals don't always come with the free valuation, free legals, low arrangement fees. I think in total across the two mortgages the cost of arranging was close to 5k. It still worked out marginally cheaper than the longer term fixes, but I will have the aggro again in 2 years time, when rates could well have moved substantially.
Sarnie said:
£5k!?!?!?
Yes ... In fairness it wasn't entirely straightforward as one property was unencumbered so incurred some additional legal costs.. but between valuations, arrangement fees, and solicitors that was the ballpark total. The rates are good enough to warrant the cost on the total borrowed. By all means shoot me a PM tho and we can have a chat.
klivedrgar said:
Yes ...
In fairness it wasn't entirely straightforward as one property was unencumbered so incurred some additional legal costs.. but between valuations, arrangement fees, and solicitors that was the ballpark total. The rates are good enough to warrant the cost on the total borrowed. By all means shoot me a PM tho and we can have a chat.
You shouldn't be paying valuations on remortgages, legal fees should be free apart from a small amount to deal with the land registry for the unencumbered property........your balances would have to be significant (£500k+) and rates near 1%, to warrant those sorts of fees I would have thought.....hard to say definitively, without the figures.....In fairness it wasn't entirely straightforward as one property was unencumbered so incurred some additional legal costs.. but between valuations, arrangement fees, and solicitors that was the ballpark total. The rates are good enough to warrant the cost on the total borrowed. By all means shoot me a PM tho and we can have a chat.
bennno said:
On a 1.49% fix which expires in May, base rate of Santander is daft so need to sign up to a fix / term deal.
Being offered
1.29% over 2 years with 3% early repayment charge
Or
1.79% over 5 years with 5% early repayment charge.
Both carry a £999 product fee. Have greater than 50% equity and chunky balance so rate important.
So who has a view on 2 or 5 years, anything better in marketplace?
Bennno
What is the ten year product offering to have completeness?Being offered
1.29% over 2 years with 3% early repayment charge
Or
1.79% over 5 years with 5% early repayment charge.
Both carry a £999 product fee. Have greater than 50% equity and chunky balance so rate important.
So who has a view on 2 or 5 years, anything better in marketplace?
Bennno
Also do they offer 7 year too if 10 is too big a step in time?
Welshbeef said:
What is the ten year product offering to have completeness?
Also do they offer 7 year too if 10 is too big a step in time?
We are looking at buying a house at the moment. Our first one.Also do they offer 7 year too if 10 is too big a step in time?
Had the fun of afforability exams etc.
We have been approved a mortgage via Nationwide and have one in principal.
The rates they showed us were around 1.8%, however for a 10 year it was more like 2.99 or 3.99 - basically the same as their "standard" mortgage rate.
I think we will be looking at a 2 or 5 year.
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